Hospitals Have Their Say Before Senate Panel On Medicaid Expansion

Feb 12, 2013

Sarasota Memorial Hospital serves a high number of uninsured and low-income Floridians.

“Without the extension of coverage Florida healthcare providers will be financially penalized with no opportunities to replace those lost revenues with additional Medicaid payments,” Sarasota Memorial Hospital President and CEO Gwen MacKenzie told a Senate panel Monday.

MacKenzie says the hospital had more than $84 million dollars in unpaid hospital bills, called uncompensated care, in 2012.

According to the Safety Net Hospital Alliance website, Sarasota Memorial has an annual budget of around $550 million. But under federal budget cuts coming down through the federal healthcare law, that budget is going to shrink.

“Sarasota Memorial’s cuts will be $145 million over the next decade. Without the extension of Medicaid, Florida providers will be footing the bill for other states...but opting in will result in an infusion of additional health spending funding for our state. For Sarasota County, its $362 million over ten years,” MacKenzie said.

That’s a net gain. Federal cuts to programs like Medicare and other pots of money to reimburse hospitals for treating the uninsured are coming down in order to fund Medicaid. Hospitals agreed to the cuts because getting something is better than getting nothing at all, “because right now there’s no cost coming in for that patient population. Even though we get paid less than the cost for those services, it’s still payment that we’re not getting now,” said Tallahassee Memorial Hospital President Mark O’Bryant.

Although many insiders believe Florida will ultimately expand the program, there is no guarantee it will happen. State officials are concerned over costs—estimates range from hundreds of millions, to billions of dollars to cover the additional people that could be added into the program. But Joan Alker, with the Georgetown Policy Center, says those costs don’t tell the real story.

“A very comprehensive study of Oregon...found their adult expansion resulted in increased financial security—medical bankruptcy is a leading cause of bankruptcy—improvements in health status, improvements in regular sources of care, and access to prescription drugs. Very dramatic improvements in care in those areas,” Alker said.

It’s not just cost that has state officials, mainly Republicans, concerned. They also worry that increasing coverage will increase demand—and that there aren’t enough physicians to meet those needs. If lawmakers decide to increase access to Medicaid, Governor Rick Scott, who opposed the Affordable Care Act, would still have to sign off on it. Scott says he's waiting for the feds to decide on Florida’s request to turn Medicaid into a managed care style program before making up his mind whether to back expanded Medicaid eligibility.

The feds have already approved a managed care system for people in long-term care. The second half of that request is to take the program statewide.